Much to gain from FTA

Their concerns regarding textiles and garments have been adequately addressed by the Malaysian Textile Manufacturers Association&#146;s (MTMA) reply that was published on March 23. There are two other matters that should be highlighted.
<P><B>Trade
Surplus </B></P><P>It is true that Singapore&#146;s trade deficit with the US
widened post FTA by US$1.4bil (RM4.8bil) in 2006. However, we should not look
only at the size of surplus or deficit without looking at the overall increase
in trade – in this case Singapore exports to US increased by 18% and imports from
the US in-creased by 20% resulting in a total trade increase of US$6.8bil (RM23.5nil)
together with its attendant economic benefits. </P><P>While we are not anticipating
a decline in the trade surplus given our expectations about increase in exports
of textiles, rubber products, furniture, etc; we are of the view that with increased
trade even a lower trade surplus can still have a positive impact on the economy.
</P><P>We wish to point out that trade surplus and deficit merely reflect the
net position of trade flows; but speaks nothing about the level of economic activity
that can be generated. </P><P>Of greater significance is the volume and value
of trade and the generation of economic activities. With a FTA, Malaysia and the
US can anticipate a higher volume of trade, generating greater economic activities,
employment and income. </P><P><B>Investment</B> </P><P>The rights that will be
accorded to the US under the FTA are not &#147;overwhelming&#148; rights that
will be given only to the US. </P><P>Currently, all investors in the manufacturing
sector, for example, can own up to 100% shares in their companies. It has just
been announced that investors in the Iskandar Development Region are free to own
100% of their companies; an indication in the opening up of our investment climate.
</P><P>It is a negotiating point as to what time frame and percentages can be
arrived at for the services sector, following our Financial Sector Master Plan
etc. </P><P>Furthermore, since 1966 Malaysia has signed Investment Guarantee Agreements
with 66 countries, including the US, which guarantees: </P><P>&#149; Protection
against nationalisation and expropriation; </P><P>&#149; Free Transfers of Profit,
Capital and Other Fees; and </P><P>&#149; Dispute settlement under the Convention
of Investment Dispute headquartered in Washington. </P><P>We do not give up anything
in agreeing to put in an FTA from what we have already signed earlier in our separate
Invest-ment Guarantee Agreements. </P><P>On the contrary, we help to reinforce
confidence in the investors&#146; boardroom when they are deciding on competing
countries to locate their operations i.e., Malaysia is a country that respects
property rights. Something which every consumer or investor will cherish. </P><P>There
is also the branding advantage of an FTA. For the businessmen and man in the street,
an FTA partner country exemplifies the following: a safe place for investment,
tourism, and business. </P><P>With protection and certainty, this can only mean
greater trade and investment and lower prices of goods and services for both businesses
and consumers. </P><P>The MITI Minister in her television interview addressed
the other issues on March 20. </P><P><B>DATUK YONG POH KON, </B></P><P><B>President,
</B></P><P><B>Federation of Malaysian Manufacturers.</B></P><P><B>Source: http://thestar.com.my/news/story.asp?file=/2007/3/25/focus/17241373&amp;sec=focus</B>